frms, only 8 percent of investing partners were women.Two percent of venture capitalists were Hispanic. Not even1 percent were black. And almost a quarter of VCs withMBAs got those degrees from Harvard.But some of that is fnally changing. In September 2017,General Catalyst hired its frst female managing partner.Union Square Ventures, First Round Capital, and FirstMarkCapital soon followed. This year, BoxGroup, RedpointVentures, and Bain Capital did the same. In June, AndreessenHorowitz hired Katie Haun as a general partner to run a new$300 million cryptocurrency fund; in July, itpromoted Connie Chan, an expert on the inter-section of Chinese and North American tech, togeneral partner.

A handful of brand-name appointments won’t
change an industry overnight. Being the only
woman on an all-male team is generally not fun,
and research shows that one woman on an otherwise all-male public-company board won’t make
much diference. (For that, you need three; there’s
little reason to think venture capital is diferent.)

And some women VCs admit they are reluctant toinvest in women. They know that if that invest-ment goes south, it’ll be doubly difcult to getsupport for the next female team. Still, “three orfour years ago, 75 percent of the venture funds inSilicon Valley did not have a woman partner,” saysTrish Costello, the founder of investing platformPortfolia. “Every one is now looking for one.”All this didn’t happen because new datashowed that diverse teams perform better. Suchteams have long been known to process factsmore carefully and be more innovative thanhomogeneous teams. According to McKinsey,companies in the top quartile for gender diver-sity are 21 percent more likely to have above-average proftability than companies in thebottom quartile. And companies whose leaders are atleast 30 percent female have net margins 6 percent higherthan companies with no women among the senior ranks.

Rewind to June 2017, when six women said they had
faced inappropriate advances from Justin Caldbeck, the
co-founder and managing partner of Binary Capital, which
had $300 million under management. Accusations quickly
followed against Dave McClure, co-founder of 500 Startups,
and, among others, Steve Jurvetson, the co-founder of DFJ.

McClure lost his job. So did Jurvetson. “This was one of thefrst times there were real consequences to bad behavior,”says Jess Lee, a Sequoia Capital partner and Polyvoreco-founder. “For the frst time, you had frms fall apart.”Venture capitalists insist that they didn’t mean to buildbrotopias. It’s just the pipeline, don’t you see? The pipelinetheory insists successful venture capitalists need to havebeen tech wizards or successful founder-CEOs—prefer-ably of companies that made truckloads of money forother venture capitalists. Tragically, the argument con-tends, there just aren’t many women who meetthose qualifcations. (Of course, with less than3 percent of venture capital going to femaleCEOs, it’s not entirely surprising that there areso few women with nine-fgure exits.)

But after Binary Capital imploded, those all-male partnerships started to look sinister. Why
couldn’t these well-connected men fnd a single
worthy woman? More crucially, frms started
worrying. If Binary hadn’t been all-male, would
Caldbeck have gotten away with such bad
behavior? (His partner knew about his reputation.) What if a venture capitalist who thinks he’s
done nothing wrong loses his frm because the
party-boy partner everyone loves to have around
behaves abominably toward a woman who’s sick
of taking it?

And suddenly, women were getting hired.

Maybe you didn’t have to have an engineering
degree or a founder’s pedigree to have the
makings of a good VC after all. “I’m not technical,” proclaimed Sarah Tavel, upon being hired
as general partner by Benchmark, although
she’d managed tech teams at Pinterest and
spent six years at Bessemer Venture Partners.

Catherine Ulrich had been chief product ofcerat Shutterstock and Weight Watchers beforeshe became the frst female partner at FirstMark. SarahSmith, the frst female partner at Bain Capital, hadpreviously been an early-stage investor and a vicepresident at Quora.

As it turns out, maybe the pipeline of those with impressive experience building products, leading teams, and
producing serious results was always a lot broader than the
old guard thought. Maybe those new female partners will
knock it out of the park. And maybe—after many years of
bad behavior and shortsighted investment theses, and after
a very recent spasm of fear—one of the last redoubts of the
old boys’ network will fnally become a bit more modern.

Welcome to Coverleaf. We hope you are enjoying your digital issue of .
Want to continue receiving your FREE digital companion issue?
Click the "Get More Issues!" button below and we will deliver your
digital companion directly to your inbox for the term of your print
subscription.